- California wants to require all cars to be EVs, hydrogen-powered or plug-in hybrids by 2035.
- The Environmental Protection Agency just approved the regulation, giving California the green light to start ratcheting up EV quotas.
- But Trump has promised to end the “EV mandate,” and the EPA waiver is unlikely to survive his next term as president.
The Biden Administration’s Environmental Protection Agency (EPA) has green-lighted California’s Advanced Clean Cars II regulations, effectively approving the state’s proposes gas car ban. With 11 other states already committed to adopting the regulations and the first set of requirements taking effect in 20266, this will have a seismic impact on the U.S. auto market.
If it survives.
California has long been given the authority to impose different, tighter emissions standards on top of federal regulations. This dates to the Clean Air Act days, as California’s geography makes it particularly susceptible to smog. Low lying coastal areas fenced in by mountains can cause heavy pollutants to settle, which blanketed much of LA with thick smog that was dangerous to breath consistently. But the EPA has to approve many of its environmental regulations, and incoming President Trump is likely to roll back federal support for this initiative.
During his first term, he withdrew California’s ability to set its own new-vehicle rules. Biden reinstated it. Trump has promised to roll-back any EV mandates this time around, and that’s what this policy effectively is. Advanced Clean Cars II will require 100% of light duty passenger vehicle sales to be Zero-Emissions Vehicles—EVs or Hydrogen vehicles—or plug-in hybrids (PHEVs). To ramp up to that, it requires 35% of all new vehicle sales to be ZEVs or PHEVs in 2026, with the quota getting stricter from there.
Eleven other states are committed to following this plan, albeit some of them with different timelines. Colorado, Delaware, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington are all on board. Washington D.C. is also committed. This is important, as the broad number of states and their relatively scattered geography make it difficult for automakers to handle compliance. They can’t ignore these states—California alone is the nation’s biggest auto market—but they also can’t just ship all of their EVs west and continue as normal in the rest of the country.
California is a car-heavy state, with regulations that affect the whole auto market.
The hard part is that the market is not yet moving fast enough to satisfy California’s requirements, and there’s not much time before the 2026 targets hit. About 25% of vehicles sold in California this year will be EVs, with PHEVs taking up around 4% of sales. If you include standard hybrids California is already above the 35% threshold, but the regulations don’t count those. While California may be able to hit that 35% target in 2026, it remains to be seen whether the other states will get there.
Or if it’ll matter at all. The approve is unlikely to survive a Trump Administration EPA. While California can and likely will fight for its right to set strict emissions standards, that’s a court battle that could easily end up at the Supreme Court. A quick decision is unlikely.
That’s a big, big problem. You can have your own opinion on the EV mandates. I certainly do. I’m not sure that the timeline is realistic for the states outside of California, and the auto industry is starting to crack under the financial pressure of having to sell so many EVs at a loss. But climate change demands action, and some companies are clearly slow rolling things. Wherever you fall though, there’s one obvious truth: Multi-billion-dollar industries with global supply chains, crazy high investment costs, skilled labor pools and countless challenges in dozens of markets cannot afford this level of uncertainty.
Mandate EVs or don’t. But if we spent another four years jockeying back and forth with wild swings in the regulatory climate, the U.S. auto market will face a collapse like it’s never seen. The industry needs clarity, and so do consumers.
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